2. What is an Economy?: Shifting From Destructive Inequality to Mass Prosperity 

Posted: January 21, 2025

Understanding socialist economics means stripping away the illusions and misconceptions of capitalist junk economics in general. So, let’s go all the way back to the economic basics: what is an economy? To answer this, we must look beyond money, technology, and even production, to the natural and social foundations of every economy.

Every economy is first and foremost a natural system. Humans emerged, and always exist, within the natural world, no matter how separate from nature we may seem or feel. We live in glass and cement cities, surrounded by lab-crafted materials, operating in digital environments.  Yet all of these tools and technologies flow from the creativity of human intelligence, which is itself a product of nature, sculpted by evolution. We are never disconnected from nature completely, but our modern extremely weak connection to, and economic disregard of, nature, can easily give us that impression. 

Additionally, just as everything we do ultimately comes from nature, everything we do ultimately impacts nature as well. Let’s take an extreme and absurd example: Someone with a trust fund who chooses to live their entire life in VR, never removing their headset. They are hooked to feeding and waste tubes. They never communicate with another human being, just the AI characters in their game. 

While obviously not an ideal existence, our hermit is undoubtedly still living in the natural world. They need rare earth metals for their gadgets, renewable energy or fossil fuels for the electricity, agriculture for their nutrient paste, and an earthly location for disposing waste. More importantly, they need other people to mine, manufacture, grow, and move these materials for them.  

This is not an existence completely disconnected from nature. Rather, our hermit actually shows the boundlessness and inescapability of our natural existence. It contrasts with the isolated view we normally hold, of nature only existing outside cities and the digital world, and excluding human inventions. 

Climate change has revealed to capitalist nation states what indigenous nations and communities have always known: every human economy is completely embedded in the natural world. This means socialist economics isn’t only concerned with balancing financial budgets; we also need to ensure a symbiotic relationship with the atmosphere, bodies of water, plants and animals, and every other human being. 

Our hermit example shows how the natural foundation of economic activity can be obscured through social structures. The hermit never encounters the many people, all around the world, who work to shape the natural world on his behalf. This gives him the illusion of self-sufficiency and independence, masking his dependence on the world’s workforce and resources. 

Every economy is also fundamentally a social system, within which people labour in order to meet a society’s needs. This labour encompasses hunter-gatherers, peasant farmers, plantation slaves, medieval craftspeople, women in countless domestic contexts, and the expansive types of wage labour. An economy is thus defined by the social relationship within which people labour. There are those who do the work, and those who reap the benefits. 

In a just economy, those who do the work reap the benefits. The harder someone works, the more benefit they will gain. However, most economies are defined more by exploitation than by justice. Exploitation is the degree to which social elites use physical, cultural, or market force to drive the masses to work for the elite’s benefit. The least exploitative societies are of the hunter-gatherer type, where everyone labours and benefits in roughly equal amounts. These societies account for the vast majority of humanity’s existence, but are also scarcely present on earth today. Since then, exploitation has taken as many forms as labour: slaves work for owners, peasants for their lords, factory workers for factory owners, tenants for landlords, women for their husbands, employees for shareholders, and so on. 

So, what then is a socialist economy? We now know that it is both a natural and social system. More importantly, it takes these natural and social roots seriously, and prioritizes natural and social outcomes equally with economic outcomes. Disregarding the natural and social aspects of economic decisions can only lead to environmental destruction, planet-scale pollution, and the massive global inequality against which we’re organizing and struggling. 

The purpose of a socialist economy is to escape 5,000 years of economic exploitation and environmental destruction. We must create a non-exploitative system of production, distribution, and consumption, on a global scale. A socialist economy must feed, clothe, house, and fulfill the material and cultural needs of every worker on earth. It must harness technology to reduce our workload, rather than forcing us to adapt to merciless machines. It must give us time to contribute socially in a productive job. It must enable us to enjoy more, more meaningful leisure time. It must treat the lives of workers in Indonesia, Congo, Brazil, and Pakistan as equal to those in Europe, North America, Japan, and Australia.  

These might sound like obvious goals, but the natural and social aspects of economics are passed over in silence by junk economics. Too often, we are made to believe that the economy is only money in motion, or even money piled in big vaults (physical or digital). However, money is just a layer on top of the real productive economy. It is a means to an end, not an end in itself. We cannot eat it, we cannot wear it, we cannot live within it. Focusing on money is a crucial method of obscuring the economic roots of social and political problems. We are oppressed when junk economists attempt to disconnect our lives, our relationships, our quality of life, our habitats, and our leisure time from economic discussions. The emphasis on money over natural and social factors reaches its apex in junk economics’ worship of the stock market. 

In the next post, we will examine how the focus on the stock market obscures our economic understanding, and allows elites to mask their exploitation of workers as shared prosperity. 

If you're interested in these ideas, don't hesitate to reach out. This project is a conversation, not a lecture, so all good faith feedback is encouraged, especially from trained economists.